Nirvanix Shuts, Leaving Cloud Storage Customers Scrambling

Cloud storage provider Nirvanix announced it was shutting down on Monday, giving customers just two weeks to move their data elsewhere, two customers said.

The exit of Nirvanix, a San Diego-based company that has said it stores data for Fox Networks and National Geographic, among others, means more market share for giants like Amazon and Microsoft.

It also offers a warning about the downsides of shifting computing to the cloud.

Two weeks is not a lot of time to move valuable business data.

Steven Ampleford, chief executive of Aorta Cloud and Aorta Capital, a Nirvanix partner, said he received a phone call from Nirvanix officials with the news on Monday. “Armageddon is about to happen,” he said. Nirvanix officials didn’t tell him what would happen if customers don’t get their data out by the end of the month, he said.

“It’s crazy. This wasn’t a two man and a dog outfit,” said Chris Pyle, chief executive of Champion Solutions Group, another Nirvanix partner who received a call Tuesday morning.

Ampleford said he was told that the company had lost its latest round of funding. Pyle said he was told that the company simply could no longer compete with major market players.

Nirvanix has yet to comment publicly on the situation.

Four years ago, investors were rushing to back cloud computing startups. It turns out that the business model is tougher than many anticipated. Data centers are costly to operate, and require constant new investment in technology to keep up with the competition. Since 2011, companies like EMC, Iron Mountain, and Megaupload have dropped out of the market, sometimes leaving customers scrambling to retrieve their information.